Brother Lamin, Unravelling the puzzle around Africa's poverty is itself a knotty affair. Yes, indeed, it crossed my mind to insert into the piece Gambia for Cameroon, Serre-Kunda for Douala, and Jammeh for Biya.But then I thought again, that everyone would see the continental universality anyway. The NADD splinter is a major setback for all progresive forces in our country; and unfortuantely, coalition-building against the APRC will be an impossible enterprise for a long time to come. Many thanks, momodou sidibeh ----- Original Message ----- From: "Lamin Darbo" <[log in to unmask]> To: <[log in to unmask]> Sent: Friday, March 24, 2006 8:05 PM Subject: Re: Fw: Why Poor Countries Are Poor > > > "But perhaps Biya is not in control as much as it first appears. A little > traveling in Cameroon reveals that whether or not Biya is the > bandit-in-chief, there are many petty bandits to satisfy". > > > > > "Government banditry, widespread waste, and oppressive regulations are > all elements in that missing piece of the puzzle". > > > > > "A project that should never have been built was built, and built badly. > The lesson of the story might appear to be that self-interested and > ambitious people in power are often the cause of wastefulness in > developing countries. But self-interested and ambitious people are in > positions of power, great and small, all over the world. In many places, > they are restrained by the law, the press, and democratic opposition. > Cameroon's tragedy is that there is nothing to hold self-interest in > check". > > > Brother Sidibeh: > > The piece has virtually universal application to Africa > > I like to think Gambia 2006 is about rectifying the key issues isolated > in the piece as factors underlying our condition. > > Sad that NADD has splintered > > I thank you for a great and germane forward > > > > LJDarbo > > > > > Momodou S Sidibeh <[log in to unmask]> wrote: > Fellow Travellers, > > If you are used to reading Mr. Pembo's useful Friday allhamdulillahs, I am > sure will enjoy reading this innadillahi. Mind you please, I am not > writing arabic but mandinka! > But should in case you dislike it, I profusely apologise for the clutter. > > modou sidibeh > > > > Why Poor Countries Are Poor > The clues lie on a bumpy road leading to the world's worst library. > Tim Harford > > > > They call Douala the "armpit of Africa." Lodged beneath the bulging > shoulder of West Africa, this malaria-infested city in southwestern > Cameroon is humid, unattractive, and smelly. On a torrid evening in late > 2001, I was guided out of the chaotic Douala International Airport by my > friend Andrew and his driver, Sam, who would have whisked us immediately > to the cooler hillside town of Buea if Douala were at all conducive to > being whisked anywhere. It isn't. Douala, a city of 2 million people, has > no real roads. > > > A typical Douala street is 50 yards wide from shack to shack. It's packed > with street vendors, slouched beside a tray of peanuts or an impromptu > plantain barbecue, and with little clusters of people, standing around a > motorbike, drinking beer or palm wine, or cooking on a small fire. Piles > of rubble and vast holes mark unfinished construction or demolition work. > Along the middle is a strip of potholes that 20 years ago was a road. > > > Down that strip drive four streams of traffic, mostly taxis. The streams > on the outside are usually made up of cabs picking up fares, while the > taxis on the inside weave in and out of the potholes and other cars with > all the predictability of ping pong balls in a lottery machine. Douala > used to have buses, but they can no longer cope with the decaying roads. > So the taxis are all that's left: beaten-up old Toyotas, carrying four in > the back and three in the front, sprayed New York yellow, each with a > unique slogan: "God Is Great, " "In God We Trust," "Powered by God, " > "Toss Man." > > Nobody who sees a Douala street scene can conclude that Cameroon is poor > because of a lack of entrepreneurial spirit. But poor it is. The average > Cameroonian is eight times poorer than the average citizen of the world > and almost 50 times poorer than the typical American. And Cameroon is > getting poorer. Can anything be done to reverse the decline and help > Cameroon grow richer instead? > > That's no small question. As the Nobel laureate economist Robert Lucas put > it, "The consequences for human welfare involved in questions like these > are simply staggering: Once one starts to think about them, it is hard to > think about anything else." > > > The Missing Jigsaw Piece > > Economists used to think wealth came from a combination of man-made > resources (roads, factories, telephone systems), human resources (hard > work and education), and technological resources (technical know-how, or > simply high-tech machinery). Obviously, poor countries grew into rich > countries by investing money in physical resources and by improving human > and technological resources with education and technology transfer > programs. > > Nothing is wrong with this picture as far as it goes. Education, > factories, infrastructure, and technical know-how are indeed abundant in > rich countries and lacking in poor ones. But the picture is incomplete, a > puzzle with the most important piece missing. > > The first clue that something is amiss with the traditional story is its > implication that poor countries should have been catching up with rich > ones for the last century or so-and that the farther behind they are, the > faster the catch-up should be. In a country that has very little in the > way of infrastructure or education, new investments have the biggest > rewards. > > This expectation seems to be confirmed by the experience of China, Taiwan, > and South Korea-not to mention Botswana, Chile, India, Mauritius, and > Singapore. Fifty years ago they were mired in poverty, lacking man-made, > human, technical, and sometimes natural resources. Now these dynamic > countries, not Japan, the United States, or Switzerland, have become the > fastest-growing economies on the planet. > > Since technology is widely available and increasingly cheap, this is what > economists should expect of every developing country. In a world of > diminishing returns, the poorest countries gain the most from new > technology, infrastructure, and education. South Korea, for example, > acquired technology by encouraging foreign companies to invest or by > paying licensing fees. In addition to the fees, the investing companies > sent profits back home. But the gains to Korean workers and investors, in > the form of economic growth, were 50 times greater than the fees and > profits that left the country. > > As for education and infrastructure, since the returns seem to be so high, > there should be no shortage of investors willing to fund infrastructure > projects or lend money to students (or to governments that provide > education). Banks, domestic and foreign, should be lining up to lend > people the money to get through school or to build a new road or a new > power plant. In turn, poor people, or poor countries, should be very happy > to take out such loans, confident that investment returns are so high that > the repayments will not be difficult. Even if, for some reason, that > didn't happen, the World Bank, established after World War II with the > express aim of providing loans to countries for reconstruction and > development, lends billions of dollars a year to developing countries. > Investment money is clearly not the issue; either the investments are not > being made, or they are not delivering the returns the traditional model > predicts. > > > A Theory of Government Banditry > > As our car slowly bumped and lurched through the crowds, I tried to make > sense of it all by asking Sam, the driver, about the country. > > "Sam, how long was it since the roads were last fixed?" > > "The roads, they have not been fixed for 19 years." > > President Paul Biya came to power in November 1982 and had been in office > for 19 years by the time I visited Cameroon. Four years later, he is still > in power. He recently described his opponents as "political amateurs"; > they are certainly out of practice. > > "Don't people complain about the roads?" > > "They complain, but nothing is done. The government tells us there is no > money. But there is plenty of money coming from the World Bank and from > France and Britain and America-but they put it in their pockets. They do > not spend it on the roads. " > > "Are there elections in Cameroon?" > > "Yes! There are elections. President Biya is always re-elected with a 90 > percent majority. " > > "Do 90 percent of people vote for President Biya?" > > "No, they do not. He is very unpopular. But still there is a 90 percent > majority. " > > You do not have to spend a long time in Cameroon to realize how much > people resent the government. Much of government activity appears to be > designed expressly to steal money from the people of Cameroon. According > to the global watchdog Transparency International, Cameroon is one of the > most corrupt countries in the world. I was warned so starkly about > government corruption, and the likelihood that officials at the airport > would attempt to relieve me of my wad of West African francs, that I was > more nervous about that than the risk of malaria or a gunpoint mugging in > the back streets of Douala. > > Many people have an optimistic view of politicians and civil servants-that > they are all serving the people and doing their best to look after the > interests of the country. Other people are more cynical, suggesting that > many politicians are incompetent and often trade off the public interest > against their own chances of re-election. The economist Mancur Olson > proposed a working assumption that government's motivations are darker > still, and from it theorized that stable dictatorships should be worse for > economic growth than democracies, but better than sheer instability. > > Olson supposed that governments are simply bandits, people with the > biggest guns who will turn up and take everything. That's the starting > point of his analysis-a starting point you will have no trouble accepting > if you spend five minutes looking around you in Cameroon. As Sam said, > "There is plenty of money.but they put it in their pockets." > > Imagine a dictator with a tenure of one week-in effect, a bandit with a > roving army who sweeps in, takes whatever he wishes, and leaves. Assuming > he's neither malevolent nor kindhearted, but purely self-interested, he > has no incentive to leave anything, unless he plans on coming back next > year. But imagine that the roaming bandit likes the climate of a certain > spot and decides to settle down, building a palace and encouraging his > army to avail themselves of the locals. Desperately unfair though it is, > the locals are probably better off now that the dictator has decided to > stay. A purely self- > interested dictator will realize he cannot destroy the economy and starve > the people if he plans on sticking around, because then he would exhaust > all the resources and have nothing to steal the following year. So a > dictator who lays claim to a land is a preferable to one who moves around > constantly in search of new victims to plunder. > > I cannot confirm that President Biya fits Olson's description of a > self-interested dictator. But if he did, it wouldn't be in his interest to > take too much from the Cameroonian people, because then there would be > nothing to take next year. As long as he feels secure in his tenure, he > will not wish to kill the golden goose. Like the virus whose very > existence relies on the bodies it afflicts, Biya would have to keep the > Cameroonian economy functioning in order to keep stealing from it. This > suggests that a leader who confidently expects to be in power for 20 years > will do more to cultivate his economy than one who expects to flee the > country after 20 weeks. Twenty years of an "elected dictator" is probably > better than 20 years of one coup after another. > > Staying with the simplifying assumption that Biya has absolute power over > the distribution of Cameroon's income, he might decide to steal, say, half > of it every year in the form of "taxes" that go into his personal bank > account. That would be bad news for his victims, of course, but also bad > news for Cameroon's long-term growth. Think of a small business owner > considering an investment of $1,000 in a new power generator for his > workshop. The investment is expected to generate income of $100 a year. > That's 10 percent, a pretty good return. But since Biya might take half of > it, the return falls to a much less attractive 5 percent. The businessman > decides not to make the investment after all, so he misses out and so does > Biya. > > Olson does not predict that stable dictatorships will do good things for > their countries, just that they'll damage the economy less than unstable > ones. Of course, Biya might make his own investments-for instance, > providing roads or bridges to encourage commerce. While they would be > expensive in the short term, they would help the economy to prosper, > leaving Biya with more opportunities to steal later. But the flip side of > the businessman's problem applies: Biya would be stealing only half of the > benefits, not nearly enough to encourage him to provide the infrastructure > that Cameroon needs. > > When Biya came to power in 1982, he inherited colonial-era roads that had > yet to fall apart completely. If he had inherited a country without any > infrastructure, it would have been in his interest to build it up to some > extent. Because the infrastructure was already in place, Biya needed to > calculate whether it was worth maintaining, or whether he could simply > live off the legacy of Cameroon's colonial rulers. In 1982 he probably > thought the roads would last into the 1990s, which was as long as he could > reasonably have expected to hold onto the reins of power. So he decided to > live off the capital of the past and never bothered to invest in any type > of infrastructure for his people. As long as there was enough to get him > through his rule, why bother spending money that could otherwise go right > into his personal retirement fund? > > > Bandits, Bandits Everywhere > > But perhaps Biya is not in control as much as it first appears. A little > traveling in Cameroon reveals that whether or not Biya is the > bandit-in-chief, there are many petty bandits to satisfy. > > If you want to drive from the town of Buea to Bamenda, farther north, the > most popular way to make the trip is by bus; minibuses ply all > long-distance routes in Cameroon. Designed to seat 10 people in comfort, > they will depart as soon as 13 paying passengers have boarded. The > relatively capacious seat beside the driver is worth fighting for. The > vehicles are old bone-shakers, but the system works pretty well. It would > work a lot better if not for all the roadblocks. > > Bullying gendarmes, often drunk, stop every minibus and try their best to > extract bribes from the passengers. They usually fail, but from time to > time they become determined. My friend Andrew was once hauled off a bus > and harassed for several hours. The eventual pretext for the bribe was his > lack of a yellow-fever certificate, which you need when you enter the > country but not when riding a bus. The gendarme explained patiently that > Cameroon had to be protected from disease. The price of two beers > convinced him that an epidemic had been prevented, and Andrew caught the > next bus, three hours later. > > This is even less efficient than Mancur Olson's model predicts. Olson > himself would have admitted that his theory in its starkest form > underestimates the damage that bad governments inflict on their people. > Biya needs to keep hundreds of thousands of armed police and army officers > happy, as well as many civil servants and other supporters. In a "perfect" > dictatorship, he would simply impose the least damaging taxes possible in > whatever quantity was necessary and distribute the proceeds to his > supporters. This approach turns out to be impracticable, because it > requires far more information about and control over the economy than a > poor government can possibly muster. The substitute is > government-tolerated corruption on a massive scale. > > The corruption is not only unfair; it is also hugely wasteful. Gendarmes > spend their time harassing travelers in return for modest returns. The > costs are enormous. An entire police force is too busy extracting bribes > to catch criminals. A four-hour trip takes five hours. Travelers take > costly steps to protect themselves: carrying less money, traveling less > often or at busier times of the day, bringing extra paperwork to help fend > off attempts to extract bribes. > > The blockades and crooked police officers comprise a particularly visible > form of corruption, but there are metaphorical roadblocks throughout the > Cameroonian economy. To set up a small business, an entrepreneur must > spend on official fees nearly as much as the average Cameroonian makes in > two years. To buy or sell property costs nearly a fifth of the property's > value. To get the courts to enforce an unpaid invoice takes nearly two > years, costs more than a third of the invoice's value, and requires 58 > separate procedures. These ridiculous regulations are good news for the > bureaucrats who enforce them. Every procedure is an opportunity to extract > a bribe. The slower the standard processes, the greater the temptation to > pay "speed money." > > Inflexible labor regulations help ensure that only experienced > professional men are given formal contracts; women and young people have > to fend for themselves in the gray market. Red tape discourages new > businesses. Slow courts mean that entrepreneurs are forced to turn down > attractive opportunities with new customers, because they know they cannot > protect themselves if they are cheated. Poor countries have the worst > examples of such regulations, and that is one of the major reasons they > are poor. Officials in rich countries perform these basic bureaucratic > tasks relatively quickly and cheaply, whereas officials in poor countries > draw out the process in hopes of pocketing some extra cash themselves. > > > > Institutions Matter > > Government banditry, widespread waste, and oppressive regulations are all > elements in that missing piece of the puzzle. During the last 10 years or > so, economists working on development issues have converged on the mantra > that "institutions matter." Of course, it is hard to describe what an > "institution" really is. It is even harder to convert a bad institution > into a good one. > > But progress is being made. We've just seen one kind of institution: > business regulations. Sometimes, it can be improved with simple publicity. > After the World Bank revealed that entrepreneurs in Ethiopia couldn't > legally start a business without paying four years' salary to publish an > official notice in government newspapers, the Ethiopian government > scrapped the rule. New business registrations jumped by almost 50 percent > immediately. > > Unfortunately, it is not always so easy to get corrupt governments to > change their ways. Although it is becoming clearer and clearer that > dysfunctional institutions are a key explanation of poverty in developing > countries, most institutions cannot be described with an elegant model > like Mancur Olson's, or even with careful data-gathering by the World > Bank. Most unhappy institutions are unhappy in their own way. > > Such a uniquely backfiring setup was responsible for the world's worst > library. A few days after I arrived in Cameroon, I visited one of the > country's most prestigious private schools-Cameroon's equivalent of Eton. > The school boasted two separate library buildings, but the librarian was > very unhappy. I soon understood why. > > At first glance the new library was impressive. With the exception of the > principal's palatial house, it was the only two-story structure on campus. > Its design was adventurous: a poor man's Sydney Opera House. The sloped > roof, rather than running down from a ridge, soared up in a V from a > central valley like the pages of an open book on a stand. > > When you're standing in the blazing sunlight of the Cameroonian dry > season, it's hard to see at first what the problem is with a roof that > looks like a giant open book. But that's only if you forget, as the > architect apparently did, that Cameroon also has a rainy season. When it > rains in Cameroon, it rains for five solid months. It rains so hard that > even the most massive storm ditches quickly overflow. When that kind of > rain meets a roof that is, essentially, a gutter that drains onto a > flat-roofed entrance hall, you know it's time to laminate the books. The > only reason the school's books still existed was that they'd never been > near the new building; the librarian had refused repeated requests from > the principal to transfer them from the old library. > > I was tempted to conclude that the principal was in an advanced stage of > denial when I stepped inside the new library to see the devastation. It > was in ruins. The floor contained the stains of countless puddles. The air > carried the kind of musty smell associated with a damp cave. The plaster > was peeling off the walls. Yet the library is only four years old. > > This is a shocking waste. Instead of building the library, the school > could have bought 40,000 good books, or acquired computers with Internet > connections, or funded scholarships for poor children. Any of these > alternatives would have been incomparably better than an unusable new > library. The school never even needed a new library in the first place-the > old library works perfectly well, could easily hold three times as many > books as the school owns, and is waterproof. > > If the library was such a pointless endeavor, why was it built at all? > It's all too tempting for the visitor in Cameroon to shrug his shoulders > and explain the country's poverty by presuming that Cameroonians are > idiots. Cameroonians are no smarter or dumber than the rest of us. > Seemingly stupid mistakes are so ubiquitous in Cameroon that incompetence > cannot be the whole explanation. There is something more systematic at > work. We need to consider the incentives of the decision makers. > > > === message truncated === > > > --------------------------------- > Yahoo! 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